大象传媒

The savings the 大象传媒 has made from senior manager redundancies exceed the cost of severance payments, today from the National Audit Office for the 大象传媒 Trust. However, the spending watchdog found that the 大象传媒 has breached its own policies on severance too often and without good reason, exceeded contractual entitlements and put public trust at risk.

The report concluded that the severance payments for 大象传媒 managers have therefore provided poor value for money.

The findings from the report include the following:

• Between August 2009 and December 2011, the 大象传媒 exceeded its target of a 20 per cent cut to the number of senior managers it employs. By December 2011, it had reduced numbers by 24 per cent to 484. By February 2013, it had further reduced senior manager numbers to 436.

• Two-thirds of all senior managers who left the 大象传媒 between 1 April 2005 and 31 March 2013 received a severance payment at a cost, after adjusting for inflation, of 拢60 million. The 大象传媒 estimates that, by 31 March 2013, it had saved 拢188 million from senior manager redundancies since 2005.

• The 大象传媒 announced in April 2013 that it is consulting staff on capping redundancy payments at the lower of 拢150,000 or 12 months' salary. This cap is lower than that applied by the civil service.

• Senior manager entitlements to pay in lieu of notice have, until the recent change in 大象传媒 policy, tended to exceed the terms available within the senior civil service. In 14 of the 60 cases the NAO reviewed, the 大象传媒 paid senior managers more salary in lieu of notice than would be provided by their contractual entitlement, costing licence fee payers at least 拢1 million. The NAO identified two cases where the 大象传媒 knew that departing senior managers had secured future employment before they had left.

• Decisions to award severance payments that exceed contractual entitlements have, until recently, been subject to insufficient challenge and oversight. For example, in five of the NAO's 60 sample cases, the 大象传媒 made unusual payments that were subject to little central assessment of the potential risks to the 大象传媒 of making them. These included committing to purchasing 拢60,000 worth of consultancy services.

• The 大象传媒 Trust paid the former 大象传媒 Director General, George Entwistle, 拢475,000 after announcing his resignation. This included three weeks' salary worth 拢25,000 that was not part of his severance payment of 拢450,000.

Among the NAO's recommendations are that the 大象传媒 should include within its remuneration strategy the principles that will guide decisions on severance entitlements, and ensure that its revised severance polices are communicated clearly and consistently applied. The 大象传媒 should increase scrutiny of severance payments that differ from standard entitlements.

The 大象传媒 Trust accepts these recommendations and will ensure they are implemented in full. In its published response to the NAO's report the Trust has said that:

• Some of the conclusions reached by the NAO in its report are deeply worrying, particularly the failure, in the past, of the 大象传媒 Executive and its Remuneration Committee to always follow agreed policy and entitlement. Such practices are entirely unacceptable and the 大象传媒 Trust welcomes the far stricter approach now introduced by the current Director General and the Non-Executive Directors of the 大象传媒's Executive Board to both severance policies and their implementation.
• While the 大象传媒 Trust is not empowered under the Royal Charter to intervene directly in decisions around individual employment arrangements other than those for the Director-General, it will require far higher levels of reporting and annual assurance in regard to the remuneration policies and practices of the 大象传媒 going forward.
• The Trust notes the NAO finding that the severance payment to George Entwistle in November 2012 was equivalent to his notice period of 12 months. The Trust has since agreed with the current Director-General a reduction to his notice period from 12 to six months.
• It will look to the new Director-General to implement rigorously his recently announced policy on severance including the 拢150,000 cap on future payments.
• It will require the Executive to report back on progress against each of the agreed actions as part of formal, regular reporting and assurance from the Executive Board Remuneration Committee to the 大象传媒 Trust.聽 In doing so, it expects the Executive to investigate any failures that have been identified in the approval process for previous payments, ensuring that these are dealt with by the Executive's new procedures.聽 The Trust and Executive's shared aim is to make certain that no such failure can recur.
• It will ensure that decision makers are held to account for any departures from the new policy by requiring the 大象传媒 Executive to report publicly in the 大象传媒's audited Annual Report and Accounts on any exceptions and the justification for them.
• It will ensure that a follow up review is carried out within two years to provide further assurance that the NAO's findings and recommendations have been acted upon.

Anthony Fry, 大象传媒 Trustee and Chair of the Trust's Finance Committee said:

"We asked the NAO to carry out this review following public concern about the size and frequency of severance packages at the Corporation, and this report shows that those concerns were justified. Although the 大象传媒 has achieved significant savings in its senior manager pay bill, some of the NAO's conclusions are deeply worrying, particularly the failure to follow agreed severance policies in a number of cases as a result of weak governance from the 大象传媒 Executive in the past. Such practices are unacceptable, and I have no doubt that they will, quite rightly, be met with considerable dismay by licence fee payers and staff alike.

"The Trust is clear that there cannot be a repeat of such a fundamental failure of central oversight and control. We welcome the Director-General's plans to introduce a cap on severance payments to 拢150,000, bringing it well under that operated by the Civil Service, and we have asked the Exec to increase the transparency of the 大象传媒's severance payments by disclosing more information in the Annual Report and Accounts. We will also expect a follow-up review to be carried out within two years."

Amyas Morse, head of the National Audit Office, said today:

"The 大象传媒 has too often breached its own already generous policies on severance payments. Weak governance arrangements have led to payments that exceeded contractual requirements and put public trust at risk.

"The 大象传媒's proposal to cap redundancy payments, announced in 2013 by the new Director General, is a signal of change for the better. It is well below the maximum that applies to civil servants."

Key facts

Notes for editors

1. The 大象传媒 employs around 19,600 staff. As at February 2013, this included 429 senior managers working for the 大象传媒, and a further seven working at the 大象传媒 Trust. The 大象传媒's total annual staff costs are nearly 拢1 billion. In recent years, as part of its wider efforts to cut costs, the 大象传媒 has reduced the number of senior managers it employs. It has also taken steps to reduce associated salary costs.

2. The NAO report examines the 大象传媒's existing approach to setting severance conditions and wider benefits for its senior managers, and how it applied its policies in practice. The term 'severance' in the report includes redundancy payments, salary in lieu of notice and other discretionary payments.

3. Press notices and reports are available from the date of publication on the NAO website, which is at聽聽and the Trust website, which is at聽www.bbc.co.uk/bbctrust. Hard copies can be obtained from The Stationery Office on 0845 702 3474.

4. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 867 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of almost 拢1.2 billion in 2012.